Once the Brexit transition period ends, the UK and devolved governments will no longer be obliged to conform to European Single Market regulations.

In their place, the UK Government is proposing to legislate for a “UK Internal Market.” In his foreword to a recent White Paper, Business Secretary Alok Sharma states that for centuries:

“the UK’s Internal Market has been the bedrock of our shared prosperity, with people, products, ideas and investment moving seamlessly between our nations.”

This Insight examines that view of the “Internal Market.” It sets out its historical origins and considers its importance as the United Kingdom prepares to leave the EU Single Market.

What are internal markets?

The EU internal market “is a single market in which the free movement of goods, services, capital and persons is assured, and in which citizens are free to live, work, study and do business.”

The UK Government’s White Paper argues that a similar UK Internal Market can be traced “back to the Acts of Union of 1706 and 1707.”

Acts of Union

The Acts of Union created the new state and parliament of Great Britain. The White Paper argues that the Internal Market has been “enshrined” in British law “for over three centuries”, while in 1973 European directives, regulations and case law “replaced British law and took on an integral role in the legislative underpinning of the Internal Market.”

This echoes an argument from the These Islands think tank that a “single market” was first formed in 1707.

The White Paper cites Articles 16 and 17 of the Anglo-Scottish Treaty. It argues that these standardised how goods were to be weighed, measured and paid for in England and Scotland. But, it adds that the Treaty of Union “did not fundamentally change the religious, legal or local government systems of Scotland or England & Wales.”

The Union expands

The White Paper notes that the “Union grew further” when Ireland and Great Britain formed the United Kingdom in 1801. Although it does not go into detail, Article Six of the Union with Ireland Act 1800 dealt with what might be called “Internal Market” matters. This stated:

that his Majesty’s subjects of Great Britain and Ireland shall […] be entitled to the same privileges and be on the same footing, as to encouragements and bounties on the like articles, being the growth, produce or manufacture of either country respectively, and generally in respect of trade and navigation in all ports and places in the United Kingdom and its dependencies; and that in all treaties made by his Majesty his heirs and successors, with any foreign power, his Majesty’s subjects of Ireland shall have the same privileges and be on the same footing as his Majesty’s subjects of Great Britain.

The Internal Market and devolution

The White Paper argues that the devolution settlements in 1921 and 1999 were designed to keep “the UK Internal Market open.” So while the Government of Ireland Act 1920 “transferred” several matters to Northern Ireland, trade was “excepted.” This meant it remained the responsibility of the Westminster Parliament.

The Belfast/Good Friday Agreement of 1998 acknowledged the prospect of North-South co-operation. But the Northern Ireland Act 1998, Scotland Act 1998 and Government of Wales Act 1998 (as amended) offered, according to the White Paper, “protection for the single market in goods and services within the United Kingdom.”

The academic Katy Hayward has observed that although the UK Internal Market is “something of a new and fluid concept,” it could already be said to exist legally since it is referred to in Article 6 of the Protocol on Ireland/Northern Ireland.

The White Paper further states that:

The UK is a unitary state with powerful devolved legislatures, as well as increasing devolution across England. The Scottish Parliament, the Senedd Cymru/Welsh Parliament, and the Northern Ireland Assembly are powerful democratic institutions acting within a broad set of competences. Each reflects the unique history of that part of the UK, and their history within the Union of the United Kingdom.

Muscular unionism?

As part of its consultation, the UK Government wishes to “ensure that there is widespread public understanding of the benefits of the UK Internal Market as an integral part of the Union.”

Some believe the Internal Market proposals form part of a strategy for a more “muscular unionism” being promoted by the Conservative Party. As the historian Ben Jackson has written:

Alongside Boris Johnson’s adoption of the title ‘Minister for the Union’, the strategy seems to be to rein in the centrifugal tendencies of devolution by asserting a more muscular British state, which will deliver British-badged infrastructure projects to Scotland and extend a stronger sense of British identity across government.

Internal or integrated?

Mike Russell, the Scottish Government’s Constitution Secretary, has in the past questioned the existence of a UK “single market”, saying it had “emerged as something which is used to argue against further devolution of powers.” But he acknowledged a “unitary” or an “integrated market”, which in certain respects had “existed for a very long time.”

Following publication of the White Paper, Mr Russell referred to “the so-called internal market”. In a recent letter to the Constitution Secretary, Michael Gove, the Chancellor of the Duchy of Lancaster, pointed out that the 2013 Scottish Government paper, Scotland’s Future, had made reference to a “fully integrated market” in which products could “be bought across Scotland and the rest of the UK.”

About the author:  David Torrance is a researcher at the House of Commons Library, specialising in devolution and the constitution. 

Photo by Edward Orde / CC BY-SA